Politics: Of democracy and deficits
The markets have claimed two important political scalps. The European entity that staked its claim to legitimacy on avoiding fascism should not be so cavalier with democratic processes, writes Tiarnán Ó Corráin.
It used to be fashionable to talk about the 'democratic deficit' in Europe. This term dealt with the supposed 
paradox that the European Union, a union of democratic states, was in its own operations anything but democratic. Composed of technocrats, bureaucrats, and the new portmanteau term 'eurocrats', the EU was not even close to a democracy.
This neglected some uncomfortable truths about majoritarian democracy.
If the EU was democratic, how could the states within it be thought of as equal? How could Ireland be an equal partner with Germany?
Rather than have a democracy of people, we had a sort of democracy of states. Although the Nice and Lisbon Treaties changed the rules somewhat, the basic idea remained: the EU was a union of equals.
Indeed, the resistance of smaller states to the reduction of their standing, shows how important the idea in people's mental model of the EU.
The language of the No camps in both treaties came straight from the schoolyard: larger states were “bullying” Ireland and the Irish people.
It seems now that we are all back in school, and the bullies are no longer France and Germany, but the 'markets', an abstraction so faceless and vague that almost infinite power is ascribed to it.
When the markets get involved, it seems, democracy is of little use: rather than being a fundamental principle of the European Union (no state that is not a democracy can join), it becomes an irritation, a luxury we can ill afford.
The markets claimed two important scalps: first George Papandreou, leader of PASOK, prime minister of Greece, and the son of a former prime minister.
A powerful dynast, then, was blown aside with ease.
Even his eleventh-hour attempt to hold a referendum was slapped down firmly by a combination of Angela Merkel, Nicolas Sarkozy, and a shriek of outrage from the world's media. Democracy, who has time for that when the creditors are at the door?
There is a pattern to these political terminations. First the media begins to talk about “credibility”, a nebulous concept that seems to have replaced “legitimacy” in the political lexicon. A ratings downgrade follows, and then a failed bond auction. This is enough to overthrow a democratic regime.
Papandreou and former Italian prime minister Silvio Berlusconi were summarily replaced by two technocrats. Mario Monti, former European Commissioner, was created a senator for life by the Italian President, Napolitano, and swiftly made prime minister. In Greece, Lucas Papademos, former governor of the Greek central bank, was appointed prime minister.
The trigger for these prorogations of democratic procedure were several rounds of megaphone diplomacy on the part of Sarkozy and Merkel, culminating in Papandreou being carpeted at the G22 meeting in France to be dressed down by both leaders for his temerity in proposing a referendum on the terms of Greece's bailout by the lenders of last resort.
Merkel and Sarkozy, in acting as the enforcers for the markets, sought to restore credibility to a European financial system apparently about to collapse. By doing so, they may have done more damage to the political fabric of the European Union than they realise.
Their new-found habit of holding joint press conferences to force recalcitrant countries to their will has exposed fundamental weaknesses in the institutional structure of the EU. However hard it was to cling to the notion of equality of states after the constitutional changes of Nice and Lisbon, it is almost impossible now to ignore the fact that in the EU, the power is with the centre, it is with the leaders of the union's most populous and richest nations, and that the institutions of the EU are little more than ramshackle conduits for real power, corporate and financial.
The history of democracy in Europe is neither long nor easy. To see the democratic systems of two countries overthrown by foreign pressure is destabilising for the European project. An entity that staked its claim to legitimacy on avoiding fascism and communism should not be so cavalier with the democratic process.
One of the dangers of overriding democratic procedures is a growth in populism, and the shape of this is already visible in Irish politics, where euroscepticism is more and more popular among the people, yet finds no political expression in the mainstream parties.
Europe has a bloody history of democratic failure and the rise of populist autocracies. If the Germans are, as we are often told, fearful of inflation due to their history, it seems that other historical ghosts are forgotten by Frau Merkel. They are, it is said, bedevilled by history. They fear inflation above all, hence their inflexible approach to monetary policy.
This is looking at history with one eye closed. Europe was reduced to a charnel house twice in the last century.
What is now called the European Union was created in response to this. But the Germans neglect the foundation of their economic miracle, and what made it possible for Europe to rise again from the rubble of war.
Americans understood that a ruined Europe was little use as a trading partner. It would do the Germans much good to remember the Marshall Plan of the 40s, as well as the hyperinflation of the 30s.
Lessons can be learned from both. Alas, it seems that the Germans use history as drunk man uses a lamppost, for support rather than for illumination.
